Myanmar considers applying for IMF financing to get through coronavirus outbreak

Kristalina Georgieva, the new chief of the International Monetary Fund (IMF) delivers a speech in Washington D.C., the United States, on Oct. 8, 2019. Trade disputes are taking a toll on global economy, substantially weakening manufacturing activity and investment and holding back economic potential, Kristalina Georgieva said on Tuesday. (Xinhua/Liu Jie). Sketched by the Pan Pacific Agency.

YANGON, Apr 28, 2020, Myanmar Times. The Central Bank of Myanmar (CBM) and the Ministry of Planning, Finance, and Industry are considering applying for financing options provided by the International Monetary Fund (IMF), CBM governor U Kyaw Kyaw Maung said, Myanmar Times reported.

The IMF on April 24 held a meeting via teleconference with the ASEAN countries. U Kyaw Kyaw Maung attended and discussed the negative impact COVID-19 is having on the Myanmar economy and how the country has responded so far.

The Ministry of Information released a summary of a meeting between U Kyaw Kyaw Maung and Kristalina Georgieva, managing director at the IMF.

According to that report, U Kyaw Kyaw Maung said domestic demand is sufficient to support the economy in the short term. The CBM has already taken measures to improve and encourage business by cutting interest rates by 1.5 percent. It also extended the deadline for local banks to comply with four financial directives by three years to August 2023.

However, he added that serious considerations need to be taken in the event that the outbreak drags on and economic growth continues to slow.

To mitigate against a long term slowdown, U Kyaw Kyaw Maung said the CBM is preparing applications for the IMF’s Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI) and that the country hopes to receive a positive outcome from the IMF.

According to the IMF, the RFI provides rapid and low-access financial assistance to member countries facing an urgent balance of payments need, without the need to have a full-fledged program in place.

It can provide support to meet a broad range of urgent needs and is designed for situations where a full-fledged economic program is either not necessary nor feasible.

The RFI is available to all member countries, although member countries eligible for the Poverty Reduction and Growth Trust are more likely to use the similar concessional RCF.

In response to members’ large and urgent Covid-19-related financing needs, access limits under the regular window of the RFI have been temporarily increased from 50 to 100 percent of the quota per year.

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